China’s Gamble on Industrial IoT

SHENZHEN — China is betting big on the Industrial Internet of Things (IIoT).

At present, Chinese enterprises whose status can be described as Industrial 3.0 know they need a lot of improvements, especially in cost control, production efficiency and process management.Nevertherless, the Chinese government is pushing hard the development of IIoT in China.In the context of encouraging energy conservation and green environmental protection, China has fostered a process of manufacturing upgrades in recent years.

As the industry grows, demand for services will increase and network operators and service platform providers will look for bigger profits, potentially turning them into a major power behind the IIoT market.One of the clear indicators of IIoT in China can be illustrated in the growth of manufacturing equipment for numerical controls (NC).

IIoT comes in various forms in China, including intelligent production processes, massive customization, cloud manufacturing platforms, collaborative manufacturing and collaborative innovation platforms, B2B industry e-commerce and intelligent product development tools.Industrial enterprises use internet technology and connectivity actively to reform production processes and product forms to improve quality and efficiency.

At present, Chinese enterprises whose status can be described as Industrial 3.0 know they need a lot of improvements, especially in cost control, production efficiency and process management.

Nevertherless, the Chinese government is pushing hard the development of IIoT in China.

In the context of encouraging energy conservation and green environmental protection, China has fostered a process of manufacturing upgrades in recent years. Based on the IoT “Sensing China” proposition in 2009, China’s Ministry of Industry and Information issued in 2012 the “Internet of things 12th Five-Year Development Plan.” China’s Premier Li Keqiang signed the China version of “Industry 4.0” in 2015, with a goal to extend it to “Made in China 2025.”

The proposal of “Made in China 2025” integrates the digitization of information technology and manufacturing technology into the process and combines them with intelligent manufacturing, laying groundwork for future development. In the next 10 years, the goal is to transform China from “a manufacturing big house” to “a manufacturing super house.”

Efforts to lay out China’s IIoT are still embryonic. Still, thanks to the IIoT application environment and a concentrated demand for apps, China’s IIoT sector is growing faster than that of consumer IoT applications. For the moment, the big winners from this trend are component manufacturers and system integrators. As the industry grows, demand for services will increase and network operators and service platform providers will look for bigger profits, potentially turning them into a major power behind the IIoT market.

One of the clear indicators of IIoT in China can be illustrated in the growth of manufacturing equipment for numerical controls (NC). Such equipment is more widely used by large-scale enterprises. The NC market for manufacturing equipment is expected to increase 3.3 percent annually during China’s “13th Five-Years.”

Industrial enterprises use internet technology and connectivity actively to reform production processes and product forms to improve quality and efficiency. They also leverage enterprise services offered by the internet service industry. The expectation is that China’s internet services and industrial applications will grow hand in hand, feeding off each other and creating diversified applications.

For example, Haier uses an interconnected factory business model. The consumer electronics giant integrates users’ diversified needs and demands, interacts with users and invites them to participate in the design and manufacture of the process.

The idea is that “consumers” become “creators.” The company’s Shenyang refrigerator interconnected factory has developed a flexible mass customization/manufacturing process, supporting nine platforms and more than 500 models.

This interconnected factory has three components. First, customization integrates users’ varied needs while transforming the process from inventory production to user creation.

Second, interconnection with users in real time ranges from product research to product manufacturing, suppliers and logistics providers. It covers the whole process and integrates the whole supply chain.